More women in Executive Committee (ExCo) roles would mean an average of £900 million pre-tax profit for every FTSE 350 company. Equally, balanced ExCos across all FTSE 350 companies could boost UK GDP by 2.5%.
These are the findings of the seventh-annual Women Count 2022 report, looking at the role, value and number of female ExCo members in Britain’s top 350 companies.
Gender inequality throughout FTSE 350 companies is costing businesses dearly, with billions of pounds lost because of a lack of gender diversity Having more women on Britain’s Executive Committees could yield an additional £58 billion to the UK economy, equivalent to the UK’s school’s budget and more than defence or policing.
A shocking 96% of CEOs in the FTSE 350 are men, revealing the huge gap between men and women at the top of British businesses, despite entry-level recruitment often being close to 50:50.
Around 75% of the members of Executive Committees are men, looking upward to other men for leadership, guidance, and promotion.
With the pipeline to CEO in the FTSE 35e dominated by men and women executives having far fewer female role models and fewer opportunities for promotion, businesses are excluding the energy and talent of more than half the population.
The report, commissioned by The Pipeline, also found that 10% of companies with Executive Committees have no women. Companies with female CEOs are over four times more likely to appoint women executive directors to their main board than companies with male CEOs.
The proportion of female executives on the main board of a company with a female CEO is 63% compared to 1,4% where the CEO is male. The business-critical role of Chief Financial Officer (CFO) is far more likely to be filled by a man than a woman: in the FTSE 350, 82% of CFOs are male.
Shockingly, most businesses’ main boards in the FTSE 350 have no female executive directors, and nearly 70% of companies have no female executive directors on their main boards.
Commenting on the findings, authors Lorna Fitzsimons and Margaret McDonagh said: ‘Today’s senior business leaders face unprecedented headwinds of economic turmoil, disruption to supply chains, rising commodity prices, and labour shortages. No generation of CEOs has ever confronted such a range of challenges at the same time. And yet we, as an economy, are wilfully missing out on a source of profitability, talent and innovation which is readily available within the system. To continue to systematically exclude women from senior management in top firms is an act of unbelievable folly.
“As we mourn the passing of The Queen, the longest-serving female leader in history, it is shocking to note that, in the 70 years of her reign, there has been so little change at the Executive level of our biggest companies.
‘The tragedy is not just for individual women who are blocked from fulfilling their full potential. The real tragedy is that businesses are cutting themselves off from a pool of talent and innovation, and forgoing an additional 2.5% growth in GDP. It is now unarguable to state that businesses with diverse voices at the top, across gender, race and class backgrounds, do better.”
They continued: “Our message is simple: recruit, retain and promote more women. If you want to prosper, take a hammer to the glass ceiling in your firm. Don’t just talk about it; act. The good news is, when companies make the necessary changes towards gender equality, they often see the benefits immediately.
“We call on the nation’s business leaders to set out concrete plans to advance women within their ranks. If they don’t, they will be damaging not only their reputation but their profit line, business prospects and society as a whole. It is in business’ self-interest to act now, and when they do, we will applaud them every step of the way.”